Company Lifts 2012 Revenue Growth Projection from 40-60% to 60-70%

Worcester, MA – August 2, 2012 – World Energy Solutions, Inc. (NASDAQ: XWES), a leading energy management services firm, today announced financial results for the three and six months ended June 30, 2012.

Financial Highlights (All figures are in US dollars; comparisons of performance are made between Q2 2012 results and Q2 2011 results, unless otherwise noted.)

Record Revenue and Backlog

• Quarterly revenue increased 78% to a record $8.2 million; 27% organic growth
• Total backlog rose 60% to an all-time high $40.1 million
• Annualized backlog increased 57% to a Company-best $21.7 million

Operating Results

• EBITDA* grew 108% to $1.0 million
• Adjusted EBITDA* was $1.1 million, up 65%
• Net income was $0.1 million, or $0.01 per share

Liquidity and Balance Sheet

• Cash and cash equivalents were $3.6 million, up from $1.8 million at year end

Product Line and Other Highlights

• Strong execution across traditional Energy Procurement business:
  • Won several new C&I and government contracts, including large county aggregations, industrial and institutional business
  • Renewed key government accounts, including GSA Region 2, states of CT and MA, and a large Co-eXprise customer
  • Brokered largest demand response deals in Company history, enrolling over 150 MW for large mining and data center operations
• Growing traction in new product lines:
  • Continued success in Mid-Market
    • Solid new business and renewals in TX; expanding in IL, OH and PA
  • Strong growth in Energy Efficiency
    • Awarded new Municipal efficiency designation with NSTAR
    • Revenue increased 70% from Q1 2012
  • Continued to invest in Mid-Market and Energy Efficiency teams to meet growing demand, fuel future growth

“World Energy has successfully followed its record Q1 financial performance with an even stronger second quarter,” said Phil Adams, CEO of World Energy Solutions. “I am particularly pleased with the 27% organic growth we achieved in the quarter and the fact that net income would have been $0.05 per share absent the impact of non-recurring charges. Based on our impressive growth through the first half of the year and the strength of our pipeline, we are making an upward adjustment to our revenue growth forecast for 2012, from 40-60% to 60-70%.”

Financial Review

Year-to-Date 2012

For the six months ended June 30, 2012, revenue increased by 69% to $16.2 million, primarily due to the Company’s acquisitions completed in Q4 2011 and increased auction activity in our Retail product line. Revenue from the Company’s Energy Procurement segment increased 47%, reflecting the addition of the energy procurement businesses of Co-eXprise and GSE and continued execution in the Company’s base business. The Company’s Energy Efficiency Services segment contributed 13% of year-to-date revenue, reflecting contributions from the NES acquisition and the Company’s internal energy efficiency services group.

Energy Procurement margins remained strong at 83% compared to 80% in the same period last year, while Energy Efficiency Services margins were 27%. Energy Efficiency Services margins reflect equipment, material and direct labor costs associated with completed projects. Overall gross margin declined 5% compared to the first six-months of 2011, reflecting the change in product mix in the Company’s business. Operating expenses as a percentage of sales decreased 4% to 71% as the Company continued to benefit from the operating leverage in its business model. As a result, the Company’s operating margin was 4%, a 1% decrease from the first six-months of 2011 and EBITDA* margin was 14% compared to 11% last year. The increase in operating expenses includes non-recurring charges of $0.4 million related to severance, the relocation of the Company’s corporate office and a channel partner advance. Excluding the non-recurring charges, operating and EBITDA* margins would have been 7% and 17%, respectively.

Q2 2012

Revenue for the three months ended June 30, 2012 rose 78% over the same period last year to $8.2 million, primarily due to the Company’s acquisitions and increased auction activity in our Retail and Wholesale product lines. Revenue from the Company’s Energy Procurement segment increased 49%, reflecting the addition of the energy procurement businesses of Co-eXprise and GSE and continued execution in the Company’s base business. The Company’s Energy Efficiency Services segment contributed 16% of Q2 2012 revenue, reflecting contributions from both NES and the Company’s internal energy efficiency services group.

Energy Procurement margins remained strong at 83%, compared to 80% in the same period last year, while Energy Efficiency Services margins were 27%. Overall, gross margin declined 6% compared to the second quarter of 2011, reflecting the change in product mix in the Company’s business. Operating expenses as a percentage of sales decreased 5% to 71% as the Company continued to benefit from the operating leverage in its business model. As a result, the Company’s operating margin was 3% compared to 4% in the second quarter of 2011, and EBITDA* margin was 12% compared to 11% in the prior year quarter. The increase in operating expenses includes non-recurring charges of $0.4 million related to severance, the relocation of the Company’s corporate office and a channel partner advance. Excluding these non-recurring charges, operating and EBITDA* margin would have been 8% and 17%, respectively.

At June 30, 2012, the Company had cash and cash equivalents of $3.6 million, compared with $2.4 million at March 31, 2012 and $1.8 million at December 31, 2011. The increase in cash and cash equivalents during the quarter was primarily due to cash generated by EBITDA* of $1.0 million. The Company has short-term commitments of $4.8 million related to its acquisitions, including Notes payable to sellers of $1.0 million due in the third quarter and $2.0 million due in the fourth quarter of 2012 and contingent consideration payments of $1.8 million due in the first quarter of 2013. The Company believes its operating cash flow will be adequate to meet these obligations when due. The Company has not borrowed against its $2.5 million line-of-credit and is in compliance with all covenants.

Note: Backlog relates to contracts in force on a given date representing transactions between bidders and listers on our platform related to commodity brokerage assuming listers consume energy at their historical usage levels or deliver credits at expected levels. Total backlog represents the revenue that the Company would derive over the remaining life of those contracts. Annualized backlog represents the revenue that the Company would derive from those contracts within the 12 months following the date on which the backlog is calculated. Total and annualized backlog at June 30, 2012 included commodity backlog of $39.2 million and $20.8 million, respectively. In addition, total and annualized backlog include contracted management fees between World Energy and energy consumers for energy management and auction administration services of $0.9 million that are expected to be received over the following 12-month period. These management fees can be terminated within 30 days per the terms of the contracts.

Conference Call & Webcast

World Energy will hold a conference call today, August 2, 2012, at 5:00 p.m. (ET) to discuss its financial results and other corporate developments. To access the conference call by telephone, dial 1 (888) 517-2458 (domestic) or 1 (847) 413-3538 (international) and enter passcode 7543 459#. A replay will be available two hours after the completion of the call, and for one week following the call, by dialing 1 (888) 843-7419 for domestic participants or 1 (630) 652-3042 for international participants, and entering passcode 7543 459# when prompted.

Participants may also access a live webcast of the conference call through the investor relations section of World Energy’s website, www.worldenergy.com. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast. An archived replay of the webcast will be available for 90 days.

Non-GAAP Financial Measures

World Energy continues to provide all information required in accordance with GAAP and also provides certain non-GAAP financial measures. A “non-GAAP financial measure” refers to a numerical measure of the Company’s historical performance, financial position, or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable financial measure calculated and presented in accordance with GAAP in the Company’s financial statements. World Energy provides EBITDA and adjusted EBITDA as additional information relating to our operating results. These non-GAAP measures exclude expenses related to share-based compensation, depreciation related to our fixed assets, amortization expenses associated with acquisition-related assets and capitalized software, net interest and income tax expense.

Management believes it is useful to exclude depreciation, amortization, net interest and income tax expense as these are essentially fixed amounts that cannot be influenced by management in the short term. In addition, management believes it is useful to exclude share-based compensation as this is not a cash expense.

Management uses these non-GAAP measures for internal reporting and bank reporting purposes. World Energy provides these non-GAAP financial measures in addition to GAAP financial results, because management believes that these non-GAAP financial measures provide useful information to certain investors and financial analysts in helping them to better understand the Company’s operating results and underlying operational trends. They also provide a consistent basis for comparison across accounting periods.

These non-GAAP financial measures are not prepared in accordance with GAAP. These measures may differ from the GAAP information, even where similarly titled, used by other companies and therefore should not be used to compare the Company’s performance to that of other companies. There are significant limitations associated with the use of non-GAAP financial measures. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net income prepared in accordance with GAAP.

Whenever World Energy reports non-GAAP financial measures, a reconciliation of the non-GAAP financial measure to the most closely applicable GAAP financial measure will be made available. Investors are encouraged to review these reconciliations to ensure they have a thorough understanding of the reported non-GAAP financial measures and their most directly comparable GAAP financial measures. Reconciliation of GAAP net income to EBITDA and adjusted EBITDA is shown below:

About World Energy Solutions, Inc.

World Energy Solutions, Inc. (NASDAQ: XWES) is an energy management services firm that brings together the passion, processes and technologies to take the complexity out of energy management and turn it into bottom-line impact for the businesses, institutions and governments we serve. To date, the Company has transacted more than $20 billion in energy, demand response and environmental commodities on behalf of its customers, creating more than $1 billion in value for them. World Energy is also a leader in the global carbon market, where its World Energy Exchange® supports the ground-breaking Regional Greenhouse Gas Initiative’s (RGGI) cap and trade program for CO₂ emissions. For more information, please visit www.worldenergy.com.

This press release contains forward-looking statements. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We have based these forward-looking statements on our current expectations and projections about future events, including without limitation, our expectations of backlog and energy prices. Although we believe that the expectations underlying any of our forward-looking statements are reasonable, these expectations may prove to be incorrect and all of these statements are subject to risks and uncertainties. Should one or more of these risks and uncertainties materialize, or should underlying assumptions, projections or expectations prove incorrect, actual results, performance or financial condition may vary materially and adversely from those anticipated, estimated or expected. Such risks and uncertainties include, but are not limited to the following: our revenue and backlog are dependent on actual future energy purchases pursuant to completed procurements; the demand for our services is affected by changes in regulated prices or cyclicality or volatility in competitive market prices for energy; and there are factors outside our control that affect transaction volume in the electricity market. Additional risk factors are identified in our Annual Report on Form 10-K and subsequent reports filed with the Securities and Exchange Commission. The forward-looking statements made in this press release are made as at the date hereof. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, other than as required by securities laws.

For additional information, contact:

WORLD ENERGY SOLUTIONS, INC.

SUMMARY OF CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

SUMMARY OF CONDENSED CONSOLIDATED BALANCE SHEET

Source: World Energy Solutions, Inc.